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“We are planning a substantial mixed-use development on the property,” Lee Piccoli, president of Fusion Homes, said.

At least two highrise buildings are to be constructed and very likely some townhouses as well. The company will look into the demand for office and retail space in that area, but that will not be a large part of the project.

Piccoli did not want to speculate on when construction will begin.

“I am very bullish on downtown Kitchener,” Piccoli said. “When the opportunity came up, we jumped at it.”

Surface-parking lots now dominate the block where a used-car lot and a car rental agency operate.

“I think as a developer you’re always trying to see something, not as it looks now, but as it looks three or five years from now. So that is something that we found really attractive about the property,” Piccoli said.

King Street East has seen slow, steady improvement since the City of Kitchener built the $22-million farmers’ market, which opened in 2005.

Since then, three bakeries, two restaurants and a small grocery store have opened on adjacent blocks. Abandoned homes on Madison, Eby, Cedar and Duke streets have been renovated and occupied.

Fusion Homes’ move follows, by six years, the creation of a special program — called the economic development investment fund — that pumped about $100 million into different downtown projects.

“The mayor and the council seem really committed to the redevelopment,” Piccoli said.

Cory Bluhm, an urban planner who works with the city’s economic development department, is pleased to see the large private-sector investment in that property.

On the next block is one of the most handsome redevelopments in the downtown, the Betzner Brownstones, and that makes it doubly frustrating to look at surface-parking lots nearby, Bluhm said.

“You can see what they did with the Betzner Brownstones on the next block and you think: ‘Geez, why can’t somebody do the same thing there,’ ” Bluhm said.

Five years ago that land would probably have fetched $500,000 an acre. Fusion Homes paid about $1.5 million an acre.

“Thing are changing,” Benninger, said.

The past 10 years have seen a growing list of high-density development in the core and central neighbourhoods, including — the Sandhills development and Iron Horse Towers on Queen Street South, the Kaufman Lofts on King Street, Lofts on Mansion, Le Marche Residences behind Your Kitchener Market, The Regency at Queen and Weber streets and the Drewlo apartments on Victoria Street South adjacent to Victoria Park.

The school of pharmacy, the medical school, the graduate school of social work, the redevelopment of the Lang Tanning building and the planned light-rail transit line are also hugely positive influences, Benninger said.

“It’s all these incremental things,” Benninger said.

“It’s amazing to me as I’ve watched the downtown transition,” Benninger said. “At one time we were one of the lone brokers that were doing work in the downtown because nobody wanted to pay any attention to it.”

By 2016, the provincial Places to Grow Act will require cities in the Greater Golden Horseshoe to direct 40 per cent of new development into existing neighbourhoods in central Kitchener, central Waterloo and the Galt section of Cambridge.

The legislation aims to curb urban sprawl over farmland. Kitchener has about a 20-year supply of land for new subdivisions, Waterloo is down to about 10 years and Cambridge is somewhere in between.

“For a company like ours, we are young, we are innovative, and we are cutting edge and we want to grow. To plan to grow just through building greenfields, I don’t think there is going to be enough product out there, to be honest,” Piccoli said.

“So part of our evolution as a company is to make the commitment to work with municipalities and the province to build more infill projects and more mixed-use projects and things like that,” Piccoli said.

Quote:KITCHENER — Plans for hundreds of residential units and commercial space on King Street East may hinge on whether the developer qualifies for millions in incentives provided to other builders in the core.

And Coun. Frank Etherington, who represents that part of the city, supports the call by Fusion Homes to include its property in the zone where fees are waived by the city and region in a bid to attract new development.

“I think it’s a good idea,” Etherington said. “The downtown finally seems to have some healthy momentum and I am in favour of anything we can do to add to that momentum.”

Fusion Homes bought the entire block bordered by King, Cameron, Charles and Madison streets. It plans to build brownstone-style townhouses, a couple of condominium towers and some commercial space on that block.

“This particular development will sit alongside light-rail transit on Charles Street and it is within spitting distance of the core area,” Etherington said.

“So I think it should be treated like any other part of downtown,” Etherington said. “It also adds some much-needed east-end development that helps address and improve some of that decline we have seen over the years in that area.”

Currently the developer would have to pay $4 million to $6 million in development charges alone — special fees that are paid when building permits are issued. Those charges are used to pay for infrastructure, such as sewer pipes, water mains and roads, to support new development.

But that infrastructure is already in place for this project and the city staff are currently reviewing the Official Plan — a massive document that governs all land use in the city. That plan now defines the boundary for what is called the Downtown Community Improvement Plan — roughly bounded by Courtland, Weber, Cedar and Francis streets.

Any development within the boundary qualifies for incentives. The fusion property is one block east of Cedar Street — just outside the boundary. It is a strategic property that will frame the entrance to downtown east and the Market District, said Larry Kotseff of Fusion Homes.

“We look at the corridor from the market down to Ottawa as the gateway into the downtown,” Kotseff said.

The Region of Waterloo will build a light-rail line along Charles Street and a station is slated for Charles and Ottawa. One of the main objectives of the light-rail project is to spur new development along the urban spine and that’s exactly what Fusion is proposing.

“What projects of this nature need are real champions,” Kotseff said.

The developer faces some expensive challenges on this site, including underground parking that costs about $35,000 per space.

“What I really think downtown Kitchener needs is a node of activity at this particular end,” Kotseff said.

Millions were invested in the west end in recent years, including the Kaufman Lofts at King and Francis streets, The Tannery at Charles and Victoria streets, the University of Waterloo school of pharmacy at King and Victoria and the medical school next door. The Breithaupt Block will see lots of office space created in an old factory at King and Breithaupt. A large multi-model transit station is slated for King and Victoria as well.

Incentives to encourage development in downtown east will help create momentum in that end of the core, Kotseff said.

Before the Official Plan is updated next year, Fusion Homes hopes to see the development qualify for incentives. Some of the changes to the Official Plan will include the mixed-use corridors along King Street East, King Street West, Victoria street north and south, part of Queen Street and part of Ottawa street.

These corridors were put in place to encourage high density, mixed use developments with little or no surface parking. The buildings are to be close to the street and certain land uses, such as gas stations, car lots and drive-throughs are discouraged.

Developer wants city to extend incentives to east of downtown boundaryJune 3, 2013 | Terry Pender | The Record | LINK

Quote:KITCHENER — There will be calls to assist developers along King Street East in upcoming discussions about how the city should support new construction on underutilized land in the downtown area.

At stake are millions in profits for developers and how fast litter-strewn, derelict properties are transformed into attractive, high-density, mixed-use areas that will support the light rail transit.

Parts of the downtown are seeing a lot of interest from developers, but that will not happen along King Street East — from Cedar to Ottawa streets — until the same suite of incentives are provided in that area too, said Larry Kotseff, a vice-president of Fusion Homes.

But a discussion paper released last week by the City of Kitchener keeps the existing boundaries in place that decide who qualifies for the incentives, and who must pay all of the development costs on their own.

Kotseff said he is surprised and disappointed the boundary was not extended eastward along King Street.

In December 2010 Fusion Homes bought the entire block bounded by King Street East, Madison Avenue, Charles and Cameron streets. A used-car lot, an auto-repair garage and a car-rental outlet dominate the property now.

Fusion Homes paid $3.6 million for the nearly one-hectare (2.4-acre) block. It plans to build 250 residential units in a combination of townhomes and two larger buildings.
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If the property were located one block to the west, Fusion Homes would qualify for a $4 million reduction in development charges — special fees that are paid when building permits are issued — among other supports.

"Nothing is going to happen in that King Street East corridor, in my opinion, until there is some fairness in the game," Kotseff said. "It is a tough area to be the first one in down there."

For Kotseff, fairness means providing developers on King Street East with the same incentives as those in the downtown.

Currently, the City of Kitchener eliminates or reduces fees, permit costs and special charges for new development that occurs within a clearly defined area in the downtown — roughly along the north downtown along Weber Street from Breithaupt to Cedar streets; and bounded on the south side of the downtown along Joseph, David and Charles streets.

To encourage development in that zone the city offers a 50 per cent reduction to post-development tax increases for up to three years, rebates for planning and building permit fees, exemptions from parkland fees, a facade improvement loan/grant and exemptions from development charges.

That package of incentives now saves a developer $16,100 per unit in a condominium building, $15,871 a unit in apartment buildings, up to $15,534 per unit when converting an old factory into residential condos.

"For us, the challenge is where do you draw the line?" Cory Bluhm, the manager of downtown development, said of the boundaries for incentives.

"No matter where you put the line there will always be somebody on the other side saying: 'What about me?' " Bluhm said.

The city now proposes to eliminate the exemptions for parkland fees, end the three-year post-development tax exemption and eliminate the upper-storey renovation program. It will retain facade improvement grants, the program to clean up former industrial sites, and modify the rebates for planning, building, and permit fees.

A modified incentive package is needed, Bluhm said, even after the growing list of public and private sector investments in the downtown during the past 10 years.

"Downtown Kitchener is still not over the hump," says Bluhm's discussion paper. "Despite having more than 2,800 residential units in the planning and design stages for the downtown and surrounding neighbourhoods, developers remain cautious."

The city also proposes to add a new incentive — up to $40,000 for each high-tech startup firm that sets up shop in the downtown.

"They are key to the future of the downtown," Bluhm said of the startups.

KITCHENER — The ambitious plans for the redevelopment of an entire block on King Street East is facing much tighter deadlines.

Guelph-based Fusion Homes wants to build townhouses and apartments in a mixed-use redevelopment of the block bounded by King, Cameron, Charles and Madison. The block is now dominated by a gravel parking lot, a used-car business and a car rental business.

Normally, a big project like this would be staged over many years, but the city council's decision to end incentives for downtown development created a much tighter timetable.

The incentives save the developer millions of dollars.

"That's our window of opportunity," Larry Kotseff , the senior land development executive at Fusion, said. "It's tight, there's no question it is very tight, but it means we have to get rolling soon."

To qualify for the incentives construction must start by July 1, 2016. The last of the building permits must be in hand by March 2019. ...

The comments in the article about the parking challenges/high water table, the strip of land lost to LRT requiring some redesign, the tight time-frame and the fact that the project appears quite dependent on the development charge waiver make me wonder if we won't see some down-sizing of this proposal before it gets underway?

I have been waiting for the details of this project to emerge since December 2010. I really hope that full scale project roll out is not compromised in an effort to get some tax incentives. Fusion is behind a pretty exciting project " The Metal Works" in Guelph and I am hoping to see something of that caliber here.

I have been waiting for the details of this project to emerge since December 2010. I really hope that full scale project roll out is not compromised in an effort to get some tax incentives. Fusion is behind a pretty exciting project " The Metal Works" in Guelph and I am hoping to see something of that caliber here.

Just rediscovered this project tonight. It seems like it's stuck in red tape which is too bad. This side of downtown desperately needs developed. The Record helped by moving into old market square and the new market brought a little life to it, but it's still a wasteland: empty lots, closed down businesses, decrepit buildings, squats...

Hopefully the LRT system will bring in some investment. But instead of condos I'd like to see apartments, affordable housing, more retail that can help lower income individuals and provide them with jobs. It's nice to see downtown growing but do not forget about those who have called this place home for their entire lives being driven out by high rents, changes in property values and a change in job markets to technology and so on.

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